Panagariya's return to academia resembles that of the former Reserve Bank of India governor Raghuram Rajan's journey in a sense -- except for the fact that unlike Rajan, he was a staunch supporter of Prime Minister Narendra Modi's vision.

Reports, however, say there were other provocations, from outside and within the organisation, that cut short the his stint after a little over two-and-a-half years.

Niti Ayog, its first part an acronym for National Institute for Transforming India, was established in 2015 to replace the Planning Commission, a Nehruvian legacy, to strengthen the federal character of the nation. It appointed, apart from Panagariya as its chief, economist Bibek Debroy and bureaucrat Amitabh Kant in top roles. But mandated to help the Centre with economic policy-making, Niti Ayog has run into trouble in its short lifetime so far.

As The Indian Express noted, several rightwing groups, backed by the Rashtriya Swayamsevak Sangh (RSS), were unhappy with the way Niti Ayog functioned under Panagariya.

The most dissatisfied among these bodies was the Swadeshi Jagran Manch (SJM), the economic wing of the RSS, which is opposed to the introduction of genetically-modified (GM) crops, a proposition the Niti Ayog favours. Its other complaints included the Niti Ayog's plan to introduce taxation on farm income as well as its intervention in pricing of medicines and other medical products. SJM criticised its moves as being anti-poor and for being hand in glove with the corporate lobby. It also organised a seminar this year to review the Niti Ayog's functioning, as The Print reported, where several policies formulated by the think-tank was torn to shreds.

For his part, Panagariya spoke out against the crackdown on honest citizens by the income tax department after demonetisation last year. He emphasised the need to exempt people, especially women, who want to deposit upto ₹2.5 lakhs in cash from any scrutiny. In his time, he also recommended the privatisation of a number of government enterprises, including Air India, helped the Centre do away with a separate railway budget, and outlined a plan to move from revenue expenditure to capital expenditure.

Many of these ideas did not sit well with the Bharatiya Janata Party (BJP)-led government and its affiliates. The lack of agreement was palpable when Panagariya told the G20 summit last September that India wasn't ready to ratify the Paris agreement on climate change in terms of "domestic action" -- only for the PM to go ahead and contradict him in a public statement on 2 October.

Panagariya also differed on the proposal of introducing universal basic income scheme put forward by the Chief Economic Adviser Arvind Subramaniam. "At the current level of income and our needs for investment in health, education, infrastructure and defence, we simply do not have the necessary fiscal resources to transfer a reasonable basic income to 130 crore Indians," he told The Indian Express earlier this year.

Even within the Niti Ayog, the creation of several power centres, headed by different personalities, often led to conflicting opinions, which must not have been pleasant for Panagariya to deal with.